Profits up 42% at Northern Electric

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The Independent Online
HIGHER prices and growth in electricity demand helped Northern Electric to increase pre-tax profits by 42 per cent to pounds 98.2m last year, compared with pro-forma pounds 69.3m a year earlier, writes Mary Fagan. The company said it was boosted by the relatively robust local economy and by pounds 5m in profits recovered after undercharging in the previous year.

Northern Electric increased prices by 10 per cent in April 1991. After pressure from the industry regulator, Offer, the regional electricity companies have kept increases this year to an average 2 per cent. Northern opted for a 2.6 per cent increase.

Turnover in the year to 31 March rose to pounds 813.7m from pounds 774m in 1990/91 and earnings per share increased by 44 per cent to 59.6p.

The directors are recommending a total dividend of 18.55p, up 14.2 per cent on pro forma 16.25p last year.

Northern shed 260 staff during the year as part of a rolling programme of job reductions.

Tony Hadfield, managing director, defended the profit increase. He said the company had one of the best quality of service records in the industry and it needed high profits to continue to invest in the network.